Standard and Poor's (S&P) launched the Mila 40 index yesterday, providing a measure for the second largest LatAm market.
The Mercado Integrado Latino Americano (Mila) was launched in May this year and provides a single platform for Chile, Colombia and Peru (the Andean markets). It is now the second largest market in the Latin American region, after Brazil.
The index compiles the largest and most liquid stocks which trade on the integrated exchange.
"The Andean markets have grown rapidly in the last 10 years, they have far outstripped the LatAm markets as a whole," says Alka Banerjee, vice president of Global Equity Indices at S&P in New York.
The Mila 40 has had annualised return of 28% over the past 10 years, compared to 17% for emerging markets as a whole, she says.
She adds that because Brazil and Mexico are so large, investors in a broad LatAm index will have only a small amount of exposure to the Andean markets and therefore miss out on the growth.
The creation of Mila plus the growth of the markets makes now a good time to launch the index, says Banerjee. She adds that the index is likely to spark interest in the markets and S&P is planning to roll out a suite of sector indices for the Mila markets.
The Mila 40 is designed to be investable and it is "not a broad benchmark but a good representation of the markets". There has been some interest in the index from ETF providers, she says.
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